NU Online News Service, Jan. 16, 3:36 p.m. – Conseco Inc., Carmel, Ind., and its insurance subsidiaries have been downgraded by Standard & Poor’s, New York, even as the insurance and finance holding company announced that it had repurchased $34 million of its 2002 debt securities.

The senior debt rating of the parent was lowered to B from B+ and the preferred stock rating was lowered to CCC from CCC+.

The ratings of the Conseco insurance units were downgraded to BB+ from BBB-. S&P says the outlook on Conseco is stable.

S&P adds that although Conseco has made “considerable progress” in selling non-strategic assets, a weak economy could hamper future planned debt reduction.

Consequently, according to S&P, dividends from the insurance operations will be more important in supporting the parent. Those operations continue to maintain appropriate capitalization and liquidity, S&P says.

In addition to the $34 million repurchase, Conseco says that in the second half of 2001 it repurchased $232 million of its debt securities. The securities were repurchased at an undisclosed discount to face value.

Last week, Moody’s Investors Service, New York, also downgraded Conseco and its insurance operations.